What Sets This Gold ETF Apart
Most of the gold ETF investments that are out there are just pure long exposure to gold, which is great if that's what you're looking for. When gold is going up, that's a wonderful thing to hold. But the one thing that it doesn't do is produce income.
Most gold strategies, whether it's gold futures or physical gold bars, you're not going to get dividends out of that. So we actually invest part of our assets in options on top of our gold futures positions, which allows us to generate income in most months. Occasionally, options strategies can go against you, but on average and looking back in time, that generates income, which we then distribute on a quarterly basis.
One thing, right in the name as you mentioned, is the dividend income. So for investors looking for a little income along with their gold, that's one option. The second thing it does is when gold is really on a tear, we'll probably underperform just because gold is going straight up, and we are selling options on that, and that can lose maybe a little bit relative to gold. But that's if it's a really strong up move over a short period of time.
If gold is steadily climbing, then those options should produce some income on top of the gold investment. If gold is topping out, well, I'm sorry, I don't mean to say it's topping out, but it is at all-time highs as you mentioned, and when people become concerned about that, what happens if gold goes sideways? The strategy should keep producing some income that'll offset either that sideways market or any declines that materialize.
So, as investors want to keep their exposure to gold but maybe continue to earn income and maybe mitigate against a little bit of drawdown, this might be a strategy to consider.
